Saturday, June 18, 2011

Don’t touch my 401K

As you all know or maybe so of you know that this distressed economy has made many people dip into the 401K funds to get loans or cash out of it (at the risk of penalty and interest lost) to pay for their day to day expenditure. Now some senators want to make sure that we don’t touch our 401K and make strict conditions if we do so. Although I can understand their good intentions but they are not on the same boat as ordinary folks are right now. I believe that nobody touches their 401K until it is absolutely necessary. They don’t take loans or cash out to go on vacations or buy cars or some other fun stuff. They do that because they don’t have anywhere to turn to right now because credit has dried up, most of the houses are under water and friends and families are also in the same boat.

I can’t understand that if I have put my hard earned money into a perfectly legitimate fund established by the government, why I can’t take loans or cash out of it in times of need. The senators are not addressing this key issue of financial distress that the citizens are going through and right now the 401K is the only perfectly legitimate saving account that you have funded and the access to it should be free of any conditions as it is right now. Fine if they will penalize us with taxes or interest fees but it is still better than not having anything at all. The government has no right to change rules that is perfectly working all right with regards to 401K.